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Pan India tries to offload Sibneft LoA to Asian

Vol 19, PW 24 (11 Aug 16) Exploration & Production

Russian seismic contractor Sibneft is trying to wriggle out of its 2D contract with ONGC and gift it to Kapil Garg-owned Asian Oilfield Services.

An industry source confirms Asian is in talks with Gurgaon-based Pan India, agent for Sibneft, but warns: "Kapil (Asian Oilfields boss) will only commit if he believes he can make a profit. He will talk first about commercial matters.

Other things like technical matters and getting the reassignment of the contract approved by ONGC will come later." Another source discloses that Garg's employee and celebrated former Reliance and ONGC geologist Rabi Bastia and Pan India owner Darshan Singh are good friends. Other sources warn ONGC against giving Asian a job awarded to Sibneft.

"Asian should be blacklisted by ONGC!" he says, explaining that Asian failed to complete a Rs45cr ($7m) ONGC contract in May 2015 to shoot 250-sq km 3D in Tripura. Sibneft meanwhile has still not submitted a performance bank guarantee for the 2D job, equivalent to 10% of the annual value of the Rs450cr ($75m) to Rs500cr ($83m) two-year contract, which it should have done within 15 days of receiving the LoA on June 6.

Don't expect ONGC to complain. In September 2015 its overseas arm OVL bought 15% of Russia's second largest oilfield Vankor for $1.27bn.

Upsetting a state-owned Russian government company and by extension the Russian government is not good politics.

The ONGC officer overseeing the project refused to comment. "Speak to our director (exploration)," he said. "He is authorised to speak to the press." When asked about Sibneft's failure to submit a guarantee ONGC director exploration AK Dwivedi simply said: "These things aren't uncommon in large projects. Why are you concerned about it?" ONGC is also in breach of its Integrity Pact as Sibneft is a subsidiary of two other bidders: Geotech and Rosgeologia, alleges a source. "Point 2 of Section 2 (Commitments of a bidder/contractor) which deals with disclosure of formal, informal, agreements and subsidiary contracts of bidders was not followed while pre-qualifying Sibneft," we hear. "Clause (v) reads: bidders must not have a relationship with another bidder, directly or through common third parties, that puts them in a position to have access to each other's information, or to influence each other's bids." Geotech and Rosgeologia own 46% and 51% respectively in Sibneft and both companies also submitted bids last September in ONGC's tender to shoot 2D in this tender. Geotech was disqualified for uploading its price bid with its technical bid by mistake. Rosgeologia was disqualified for submitting the work experience certificate of a subsidiary in which it doesn't hold 100% and for offering geophones which don't meet ONGC's specifications.

The ONGC officer overseeing the project refused to comment. "Speak to our director (exploration)," he said. "He is authorised to speak to the press." When asked about Sibneft's failure to submit a guarantee ONGC director exploration AK Dwivedi simply said: "These things aren't uncommon in large projects. Why are you concerned about it?" ONGC is also in breach of its Integrity Pact as Sibneft is a subsidiary of two other bidders: Geotech and Rosgeologia, alleges a source. "Point 2 of Section 2 (Commitments of a bidder/contractor) which deals with disclosure of formal, informal, agreements and subsidiary contracts of bidders was not followed while pre-qualifying Sibneft," we hear. "Clause (v) reads: bidders must not have a relationship with another bidder, directly or through common third parties, that puts them in a position to have access to each other's information, or to influence each other's bids." Geotech and Rosgeologia own 46% and 51% respectively in Sibneft and both companies also submitted bids last September in ONGC's tender to shoot 2D in this tender. Geotech was disqualified for uploading its price bid with its technical bid by mistake. Rosgeologia was disqualified for submitting the work experience certificate of a subsidiary in which it doesn't hold 100% and for offering geophones which don't meet ONGC's specifications.